1/10/2011 @ 4:00PM

Best Places For Bargain Retirement Homes

In the suburbs of New York and Los Angeles, a four-bedroom home with a pool, three-car garage and vaulted ceilings could easily set you back $2 million or more. But 20 minutes from downtown Oklahoma City, a 2,800- square-foot house with those amenities at 9201 S.W. 26th St. is listed for a mere $239,500.

That may seem like an unusually low price, but it’s close to the norm in Oklahoma City, which tops our list of the best places to find bargain retirement homes (To find out which cities are best for people still in the workforce, see America’s Most Affordable Cities).

“There’s just about any kind of home you want around here,” says Rick Jackson, the realtor selling the aforementioned home. “There’s everything you want within the state, from mountains to casinos. For retirees, the city has a great reputation for health care facilities. It’s a great place to live.”

Oklahoma City ranks first on our list because of its low cost of living, stable home prices, low taxes and a very reasonable average home price of $78 per square foot. That’s half the cost of square footage in Miami, one-tenth of what you’d pay in Boston and one-fifteenth the greater New York City area.

Memphis ranks second on the list, bolstered by square footage rates similar to Oklahoma City’s, as well as the absence of state income taxes. Raleigh, N.C., is third, followed by Charlotte, N.C., both held back by higher tax rates than Tennessee’s. Indianapolis, Ind., rounds out the top five. The list also includes two perennial Arizona retirement hotspots: Tucson (No. 7) and Phoenix (No. 9).

“It’s not surprising that the Sunbelt areas made it onto the list,” says Tara-Nicholle Nelson, consumer educator for real estate site Trulia.com. “They have been long-time favorites among retirees, which probably contributed to their being overbuilt earlier in the decade, as Boomers looked to relocate in new homes and new communities in those areas, and as investors looked to purchase homes that would be attractive winter rentals.”

Behind the Numbers

To form our list, we used five sets of data compiled by Trulia.com from other sources. These include: median state property taxes, via Bankrate.com; highest state income tax bracket, via TaxAdmin.org; cost of living, via Kiplinger’s; price per square foot, via Trulia; and the peak-to-trough median single-family home price change (calculated as the difference in the median price change from the second quarter of 2006 to the second quarter of 2009), via the National Association of Realtors. The 50 largest metro areas in the country were included in the study.

Although there are plenty of deals to be had in traditional retirement havens like southern Florida, retirees can get more bang for their buck in states like Oklahoma and North Carolina–welcome news for baby boomers whose nest eggs haven’t yet recovered from the financial crisis.

“When home values were at their peak, many of today’s retirees were counting on their ability to cash out some home equity as a major component of their retirement plan,” explains Trulia.com’s Nelson. “Now, many have taken hits to both their home values and their retirement portfolios. As a result, retirees are looking to move to less expensive markets and are being extremely deliberate and smart about their target towns.”

Oklahoma City’s median home price held up remarkably well during the national housing bust. In fact, it rose 2% over the housing market’s rocky ride from peak to trough. That may be because the city’s residents tend to stay put and approach the property market with a long-term perspective.

“We’ve had our dips over the last 100 years, but we usually dip right out,” says realtor Jackson. “I can’t think of another city where I’d rather live.”